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Microsoft, meanwhile, sees some slowdown as it falls behind Sony, Nintendo in sales

The NPD Group, Inc. -- a top market research firm -- has released its latest console sales report for the month of May 2014.  With the exception of one small surprise (more on that in a bit), the message is the same -- Sony Corp.'s (TYO:6758) PlayStation 4 continues to dominate sales while Microsoft Corp.'s (MSFT) Xbox One remains a feisty, but struggling challenger.

I. Nintendo, Sony Win Big as Microsoft Struggles

The company's press release did not contain specifics on how many units each company sold, but it clearly indicated that Sony's console continued to dominate sales for a fifth straight month.

As of March 31 official sales numbers put Microsoft at 5 million units sold, Sony at 7 million units sold, and Nintendo Comp., Ltd. (TYO:7974) Wii U has sold 6.17 million units.  Nintendo's console launched in Nov. 2012; Microsoft and Sony's consoles went on sale a year later in Nov. 2013.
Sony PS4 controller
Sony has thus far controlled this generation of the console race.

Of the trio of console makers, Sony has thus far seen arguably the greatest success wooing third party content, while Nintendo has had the worst luck in courting developers.

The last year has been a rocky one for Nintendo, which suffered largely due to its slow response at publishing new titles in its most popular franchises, like Kirby, Mario, Mario Kart, Smash Bros., Zelda, and Donkey Kong.  It has been forced to cut its forecasts multiple times and saw sales drop early this year.  Now its looking reinvigorated.

Due to that, while Sony held the sales crown in May, Nintendo might be the biggest winner of last month for breaking out of its nearly year long slump.  Its return to growth was driven -- by its own accounting, even -- by the much anticipated release of Mario Kart 8.  Mario Kart 8 sold roughly 1.2 million copies, good enough for second place in the NPD Group's May 2014 top selling video games list.  The NPD Group report that many of those sales have come from the bundled copy, helping to drive Wii U console sales back to growth, as well.

Mario Kart 8 has been the fastest selling Wii U title in the console's young history.  It was in third place in U.S. sales (versus second globally), showing gains in a market where Nintendo struggled throughout much of late 2013 and early 2014.

Wii U Bundle

Nintendo's 3DS title Kirby:Triple Deluxe also performed admirably, earning ninth place on the list.  According to the NPD Group, the Nintendo 3DS outsold the Xbox One (let that one sink in, for a moment), earning the ranking of second best selling system for the month (behind only the PS4).

The best-selling game in May was Watchdogs, the new techno-thriller from France's Ubisoft Entertainment SA (EPA:UBI).  It was a relatively disappointing month for Microsoft in terms of content sales.  After Titanfall scored the top spot in sales last month, this month the Electronic Arts, Inc. (EA) title plummeted to eighth place in sales, behind newer releases.  Sony, meanwhile, scored a surprise hit with its exclusive MLB 14: The Show title, which launched for the PlayStation 4 (PS4), PlayStation 3 (PS3), and PlayStation Vita (PSV).

Speaking of the PlayStation Vita, Sony's portable -- while outsold by Nintendo's 3DS -- saw some progress of its own.  A Borderlands 2 PSV bundle has sold well.  The bundle introduced the American market's first major revision of the handheld.

II. A New Gaming Golden Age

Overall hardware sales rose to $187M USD for the month, up a whopping 95 percent from May 2013 ($96M USD).  Driven by 15 percent growth in video game point and subscription cards, interactive gaming toys, and gamepads, video game peripherals and accessories saw a modest 8 percent sales rise.

Game sales were also golden in May.  Downloadable content on consoles, smartphone games, and social network gaming continues to be a massive lucrative, but poorly understood channels.  In-game microtransactions, subscriptions, mobile apps, and social network game spending totaled $787M USD (est.) for the month of May.

That's well ahead of the $274M USD in software sales that the console and portable market saw (up 57 percent).  PC games, meanwhile sold an estimated $10M USD for the month.  Consoles and portables also saw $124M USD (est.) in rental and used game sales.

WatchdogsWatchdogs was not only the top-selling game for May, it also drove Ubisoft past rival EA in total sales.

In total, the NPD group estimates consumers globally may have spent nearly $1.5B USD on the gaming industry's wares.

Comments NPD Group analyst Liam Callahan on the booming month of May:

The last time overall new physical channel growth saw a month-over-month increase of this magnitude was June 2008, with a 53 percent increase... May 2014 marked the highest selling May data month for video game point and subscription cards on record.

As seen in prior months, the lift in hardware sales was driven by console hardware, which increased 137 percent in May 2014 (vs. May 2013).  While much of May 2014's hardware growth was due to Xbox One and PS4, there was also year-over-year growth for the Wii U, and PS Vita.

Collectively, May 2014 launches sold 800 percent more in dollar sales than May 2013 launches did their respective launch months. New launches represented 50 percent of dollar sales this month, which compared to only 9 percent for new launches in May 2013.

Ubisoft may not exactly be beloved by gamers as it at times is at odds with its audience, but many gamers would be pleased to know that on the success of Watchdogs, Ubisoft is estimated to have deposed EA as the world's biggest gamemaker, in the month of May.  (EA is regularly rated the "worst company" in regards to how it treats consumers.)

III. Sony -- PS4 is the "Leading Next Gen Console"

Looking ahead, June should bring more glad tidings for the gaming industry.

Sony released a cheery statement on the NPD numbers.  Senior Vice President of PlayStation Brand Marketing Guy Longworth commented:

PlayStation continues to be the best place to play for innovative IP, as PS4 was the preferred platform for May’s biggest releases, including Watch Dogs and Wolfenstein: The New Order, and held four of the top five spots for next gen software sales. PS4 is the leading next-gen platform for sports, highlighted in May by the best-selling sports game, MLB 14: The Show.

Microsoft, after releasing comments emphasizing the positives on the last two months' NPD reports (where it got beat, but still one in some regards, such as with Titanfall's strong sales) was uncharacteristically silent, and has yet to release a comment on Xbox Wire.  It's unclear whether Microsoft will bother to say anything, given that it's virtually impossible to spin this month's sales figures in its favor.
A new Kinect-less SKU could boost the Xbox One in June. 

The Xbox One maker is likely looking forward to next month's numbers.  It's hoping that the new cheaper Kinect-less $399 Xbox One SKU, will finally manage to stem the tide of Sony's victory march.  If it can not, we're likely witnessing the two console giants reverse their roles of last generation, when Sony saw slow sales of the unprofitable PS3 and Microsoft saw booming sales of its Xbox 360.

However, it's a bit premature to come to such conclusions.  Holiday 2014 will likely decided decisively the winner(s) and loser(s) of this generation of consoles.  For now, though, anything could happen.

Sources: NPD Group, via Twice



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$299.00
By Mitch101 on 6/17/2014 5:05:42 PM , Rating: 2
I think the One being outsold by the 3DS is an indicator that the consoles need to start price dropping sooner than later. What has been reached is nearly all the people who can afford a $399/$499 game console or those willing to spend that much.




RE: $299.00
By inighthawki on 6/17/2014 5:24:37 PM , Rating: 2
Agreed, the Xbox One costs too much compared to the PS4. The Kinect-less model should sell for $350 (maybe even less), and the Kinect version for $100 more. Without the Kinect, the Xbox One doesn't have very many killer features that can justify an equal price tag with PS4 while having inferior gaming performance.


RE: $299.00
By room200 on 6/17/14, Rating: 0
RE: $299.00
By quiksilvr on 6/17/2014 7:18:51 PM , Rating: 5
RE: $299.00
By Aloonatic on 6/18/2014 2:41:54 AM , Rating: 2
So, from that list I'm left with the question...

Are some developers not bothering to try to get more out of the PS4 (the games where they resolution and frame rate are the same) or are some developers not bothering to try to get more out of the Xbox One?


RE: $299.00
By BZDTemp on 6/18/2014 3:31:22 AM , Rating: 3
Loads of developers are certainly not bothered too much about optimizing for the different platforms. This hurts everywhere and when coupled them going for the lowest common then it hurts the PS4 (and the PC's for those games that are not console only).

I have a foot in both the console and PC world and whenever a game is on both console and PC I prefer the later (cheaper, mods, higher resolution, keyboard+mouse...). Some games like say the Far Cry series have done a good job taking advantage of the more powerful PC's, while others go so far has carrying over their dumbed-down GUI to the PC :-(


RE: $299.00
By room200 on 6/18/14, Rating: 0
RE: $299.00
By therealnickdanger on 6/18/2014 7:28:02 AM , Rating: 1
Silly or not, it's true. Microsoft made decisions early on to make Xbone less about games and more about everything else. This decision guided all aspects of their hardware design, which they are now stuck with. They made a series of bad decisions for consumers (privacy, licensing, Kinect, Gold requirements, price...) and they are being punished by the market. Microsoft has slowly been addressing all of these problems, but it's too little too late.

At the end of the day, it's a weaker console for more money (or the same minus Kinect). The performance gap between them will only widen with time as the PS4 sells more units and becomes the primary development console. The Xbox 360 enjoyed this role in the last generation, with the PS3 often left with sub-optimal performance even though it was more powerful. But this time, the more powerful console will be better optimized.

In either case, they're both a huge waste of money. Put a $400 graphics card in your PC and you can game at 1080p 120fps or start dabbling in 4K.


RE: $299.00
By Mint on 6/18/2014 6:15:29 PM , Rating: 2
The PS3 was not more powerful. It had a far inferior graphics architecture, and you could see this on the PC where the G7x cards got smoked by unified architecture cards with the same theoretical performance as newer games were released.

Cell's CPU superiority was not only hard to realize, but it just isn't that visible in the final product. Virtually all algorithms can be pared down to use half the CPU power and even seasoned gamers won't notice the shortcoming. The lower real-world polygon throughput and fillrate of RSX was much more visible.

This generation it's the opposite, as XBO has the weaker graphics, and it's visible. By comparison, its 7% higher clock rate (and thus superior CPU power) has a negligible effect. It's not as bad as 720p vs 1080p as some claimed (that would require PS4 to have over 2x the graphics power), but it's noticeable.


RE: $299.00
By inighthawki on 6/17/2014 8:22:10 PM , Rating: 2
You for real? I mean, I like Xbox One as much as the next guy, but pretending it's on equal footing with the PS4 is straight denial.


RE: $299.00
By room200 on 6/18/2014 6:31:49 AM , Rating: 3
I don't need to "pretend" about anything. I have no horse in this race because I don't own either of these and I'm probably gonna skip this generation of consoles. My unbiased assessment is that I don't see much of a difference between the graphics of either of these "advanced" consoles, and 99% of people won't either esp. as they are not plying 2 different consoles side by side.


RE: $299.00
By tayb on 6/18/2014 9:32:56 AM , Rating: 3
There really is no discernible different right now and there probably won't ever be for cross platform titles. The PS4 is a more powerful console so in a few years I expect to see PS4 exclusives looking slightly better than Xbox One exclusives. But in the end the graphics don't matter all that much to me, gameplay matters.

Whichever console ends up having the superior first party game lineup will sell more units. The end.


RE: $299.00
By Argon18 on 6/18/2014 12:09:18 PM , Rating: 2
"But in the end the graphics don't matter all that much to me, gameplay matters."

Agreed, just as in the movie industry, killer graphics are being used to offset weak plot. The Avatar movie for example, killer visuals, turd of a plot, crap character development, etc.

The last tier 1 console I bought was a PS3. No plans for the PS4 or One. I did just buy a $99 Ouya console however, and I'm loving it. Killer value.


RE: $299.00
By nikon133 on 6/18/2014 5:09:48 PM , Rating: 2
There will be, I think. Current games are still not pushing hardware capabilities to the limit, on average... we are still in first year of this generation's life, and not much further than half of that year... At some point, next Unreal or Crytek or... engine will become so powerful and demanding that even PS4 will have to back down to 720p in order to keep framerate and eyecandy at sufficient level. Where will XBO back down, when we come to that?


RE: $299.00
By althaz on 6/17/2014 8:26:09 PM , Rating: 3
It does have a lead in terms of exclusive titles - well it has more than one that don't suck.

That said, most people who buy consoles play mostly multiplatform games and those games simply look (a bit) better on the PS4. The PS4 will likely win this generation, but so long as it's close so no company rests on its laurels, who really cares?


RE: $299.00
By nafhan on 6/18/2014 10:53:43 AM , Rating: 2
Or maybe it's an indicator that the Xbox 360 still has a lot of excellent games, and that the One... doesn't. Regardless of the cost of the console, I'll probably pick up an Xbox One or PS4 once there's a decent library of games in the sub $20 range.

Somewhat related: I've got an Xbox 360 and I've been getting a free game every two weeks thanks to the "games for Gold" (or whatever it's called) thing. About half have been games I don't already have.


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